SINGAPORE- Asian equities extended gains on Tuesday and the dollar slipped, with investor sentiment supported by Chinese data and optimism about COVID-19 vaccines.
Chinese blue chips added 0.4 percent , buoyed by data showing China’s industrial output rose 5.6 percent in August from a year ago, expanding for a fifth straight month.
MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.3 percent, for a fourth straight day of gains.
Japan’s Nikkei shed 0.8 percent, while South Korean shares rose 0.3 percent and Australia’s S&P/ASX 200 index added 0.1 percent.
Japanese Chief Cabinet Secretary Yoshihide Suga won a landslide victory in a ruling party leadership election, paving the way for Japan’s first change of leader in nearly eight years. Strategists expect Japanese equities to take support from Suga’s win.
“He’s seen as someone who’s particularly stock market friendly. The fact that we’ve got political certainty for the next two years from someone who’s connected to the free market is going to be good news for Japan,” said Jim McCafferty, joint head of Asia Pacific equity research at Nomura.
E-Mini futures for the S&P 500 slipped 0.3 percent, while EUROSTOXX 50 futures eased 0.2 percent So far this year, gains in Asia have been led by technology stocks.
“From an asset class point of view, if you require to generate any income from your investment portfolio, then equities is one of the few places you can do that because bond yields are so low,” said McCafferty, who prefers North Asian companies due to their stronger balance sheets.
